Exhibit 4.1
[EXECUTION COPY]
STOCK PURCHASE AGREEMENT
Dated as of March 19, 2000
STOCK PURCHASE AGREEMENT dated as of, March 19, 2000 (this "Agreement")
between (i) THE A CONSULTING TEAM, INC., a New York corporation (the "Company"),
and (ii) EACH OF THE INVESTORS SIGNATORY HERETO (collectively, the "Investors",
and, individually, an "Investor").
The parties agree as follows:
Article I Authorization. The Company has authorized the issuance and sale, upon
the terms and set forth in this Agreement, of (i) the shares of the Company's
Common Stock, $.01 par value (the "Common Stock"), referred to below, (ii) the
Warrants in the forms attached hereto as Exhibit B-1 and Exhibit B-2
(collectively, the "Warrants", and, individually, a "Warrant"), and (iii) the
shares of Common Stock issuable on exercise of the Warrants (the "Warrant
Shares").
Article II Purchase and Sale of the Shares; Warrants.
Section 2.1 Each Investor hereby purchases from the Company, and the
Company hereby issues and sells to such Investor, the shares of Common Stock
(collectively, the "Shares") and Warrants set forth for such Investor in
Schedules 2.3.1 and 2.3.2 (the "Sold Securities"), for the purchase price set
forth for such Investor in such Schedules (the "Purchase Price"). Each Investor
agrees that payment for the Purchase Price shall be in the form of a promissory
note issued as of the date hereof (the "Promissory Note") providing that such
Investor will on or before the close of business on April 20, 2000 pay to the
Company the Purchase Price for such Investor's Sold Securities by cash or wire
transfer. The obligations of the Investors to pay their respective Purchase
Prices are several and not joint. Each Investor hereby pledges to the Company
the stock and warrant certificates for such Investor's Sold Securities, to
secure such Investor's obligation to pay such Investor's Purchase Price, which
obligation for each Investor shall in all events be with full recourse against
such Investor. On default by any Investor in the timely payment of such
Investor's Purchase Price, the Company shall against such Investor have all of
the rights of a secured creditor under the Uniform Commercial Code of the State
of New York as well as such other rights and remedies as shall be available to
the Company under law. On an Investor's payment of such Investor's Purchase
Price, the Company shall promptly release and deliver to such Investor the stock
and warrant certificates for such Investor's Sold Securities, free and clear of
all liens arising by or through the Company.
Section 2.2 If an Investor fails to pay its Purchase Price under the
Promissory Note issued under Section 2.1 herein by April 20, 2000 or such
Investor admits in writing its inability to pay its debts generally, makes a
general assignment for the benefit of creditors, has any proceeding instituted
by or against it seeking to adjudicate it as a bankrupt or insolvent or seeking
liquidation, winding up, reorganization or dissolution of such Investor under
any law relating to bankruptcy, insolvency, reorganization or release of debtors
or seeking the entry for an order of relief or appointment of a receiver or a
trustee for it or any substantial part of its property (provided that in case
any such proceeding is involuntarily instituted against Investor, it remains
undismissed after 30 days), then and in any such event the Company may, by
notice of default given to such Investor in writing or by facsimile transmission
declare the Promissory Note and such Investor's Purchase Price to be immediately
due and payable, without presentment, demand or protest of any kind each of
which is expressly waived by Investor; and in any even such Investor will
indemnify the Company for all reasonable costs and expenses
(including reasonable attorneys fees) incurred by the Company to collect such
Investor's Purchase Price.
Section 2.3 Upon receipt of the Purchase Price, the Company shall deliver
to the Investors an opinion of counsel dated as of the date hereof (the "Closing
Date") covering the matters set forth in Exhibit A, together with certified
copies of all requisite corporate actions taken by the Board of Directors of the
Company to authorize the execution and delivery of this Agreement and the
Warrants by the Company and its consummation of the transactions contemplated
thereby, and such other corporate documents and other papers as the Investors or
their counsel may reasonably request.
Section 2.4 Subject to and in accordance with the terms of the Warrants,
the Investors shall have the option, exercisable by notice from the Investors to
the Company given at any time (i) prior to the 60th day after the date hereof,
to purchase from the Company up to an aggregate of 607,142 shares of Common
Stock at a purchase price of $7 per share and (ii) 120 days after the date
hereof but prior to the second anniversary of the date hereof to purchase from
the Company up to an aggregate of 1,000,000 shares of Common Stock at a purchase
price of $13 per share; provided, that each Investor shall have the right to
purchase only the number of shares of Common Stock set forth in the Warrant held
by it, and provided further that no Investor may exercise any Warrants until
such Investor has paid such Investor's Purchase Price.
Article III Representations and Warranties of Company.
The Company hereby represents and warrants to the Investors as follows
except as set forth in the schedules hereto with respect to specific Sections
below:
Section 3.1 Organization.
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of New York and has all requisite corporate
power and authority to own, lease and operate the assets used in its business,
to carry on its business as presently conducted and as proposed to be conducted,
to enter into the Documents (as hereinafter defined), to perform its obligations
thereunder, and to consummate the transactions contemplated by the Documents.
"Documents" means (a) this Agreement and (b) each Warrant. The Company has made
available to any Investor who has made a request therefor copies of its
Certificate of Incorporation, as amended (the "Certificate of Incorporation")
and By-laws, as amended; said copies are true, correct and complete and contain
all amendments through the date hereof.
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Section 3.2 Qualification; Good Standing.
The Company is duly qualified to do business and is in good standing as a
foreign corporation in the States of New Jersey, Georgia, Illinois and
Connecticut. The Company is not required to be qualified in any other
jurisdiction where the failure to qualify would have a material adverse effect
on the Company. The Company is not and, upon consummation of the transactions
contemplated by the Documents will not be, an "investment company" or a company
controlled by an investment company within the meaning of the Investment Company
Act of 1940, as amended.
Section 3.3 Corporate Authorization; Enforceability, Etc.
The Company has taken all corporate action, including all action required
of its Board of Directors and stockholders, necessary to authorize its execution
and delivery of the Documents, its performance of its obligations thereunder,
and its consummation of the transactions contemplated thereby. The Documents
have been executed and delivered by an officer of the Company in accordance with
such authorization. Each Document constitutes a valid and binding obligation of
the Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium, and similar laws affecting
creditors' rights generally and to general principles of equity. The Shares have
been duly authorized and validly issued, and upon payment of the Purchase Price
will be fully paid and nonassessable and will be free of any liens or
encumbrances other than any liens or encumbrances created by the Investor
outside of this Agreement; provided, however, that the Shares are subject to the
restrictions on transfer under "blue-sky", state and/or Federal securities laws
and pursuant to this Agreement. The Warrant Shares have been duly authorized and
when issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable, and will be free of any liens or
encumbrances other than any liens or encumbrances created by the Investor
outside of this Agreement; provided, however, that the Warrant Shares are
subject to the restrictions on transfer under "blue-sky", state and/or Federal
securities laws and pursuant to this Agreement and the Warrants. The Shares and
the Warrant Shares shall not be subject to any preemptive rights or rights of
first offer or refusal except as set forth herein.
Section 3.4 No Conflict.
The execution and delivery by the Company of the Documents, its
consummation of the transactions contemplated thereby, and its compliance with
the provisions thereof, will not in any material respect (a) violate or conflict
with its Certificate of Incorporation or By-laws, (b) violate, conflict with, or
give rise to any right of termination, cancellation, rescission or acceleration
under any agreement, lease, security, license, permit, or instrument to which
the Company is a party, or to which it or any of its assets is subject, (c)
result in the imposition of any Encumbrance (as hereinafter defined) on any
asset of the Company, (d) violate or conflict with any Laws (as hereinafter
defined), or (e) require any consent, approval or other action of, notice to, or
filing with any entity or person (governmental or private), except for those
that have been obtained or made or will be made in a timely manner.
"Encumbrance" means any security interest, mortgage, lien, pledge, charge,
easement, reservation, restriction, or similar right of any third party; and
"Laws" means all laws, rules, regulations, ordinances, orders, judgments,
injunctions, decrees and other legislative, administrative or judicial
restrictions.
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Section 3.5 Capitalization.
The authorized capital stock of the Company consists of 10,000,000 shares
of Common Stock, $.01 par value (the "Common Stock"), and 2,000,000 shares of
Preferred Stock, $.01 par value (the "Preferred Stock"), of which (A) no shares
of Preferred Stock are outstanding and (B) 5,485,000 shares of Common Stock are
issued and outstanding. Except as set forth in the preceding sentence and an
aggregate of 900,000 shares of Common Stock reserved for issuance under the
Company's Stock Option Plan(s), the shares of Common Stock issued or issuable in
accordance with this Agreement and the Warrants issued by the Company in
connection herewith, and immediately after the date hereof, there will be no
outstanding (i) securities convertible into or exchangeable for shares of
capital stock or other securities of the Company, (ii) options, warrants, or
other rights to purchase or otherwise acquire from the Company shares of such
capital stock, or securities convertible into or exchangeable for shares of such
capital stock, or (iii) contracts, agreements or commitments relating to the
issuance by the Company of any shares of such capital stock, any such
convertible or exchangeable securities, or any such options, warrants or other
rights. There are no voting trusts, voting agreements, proxies or other
agreements, instruments or understandings with respect to the voting of the
capital stock of the Company. Except as set forth herein, there are no
agreements or understandings granting to any person or entity any right to cause
the Company to effect the registration under the Securities Act of 1933, as
amended (the "Securities Act"), of any shares of its capital stock.
Section 3.6 Securities Laws.
Subject to and based in part upon the truth and accuracy of the
representations and warranties of the Investor contained herein, the offering
and sale of the Shares and the Warrant Shares contemplated hereby are not
subject to the registration requirements of the Securities Act pursuant to an
exemption thereunder and are, or following the date hereof will be, exempt from
registration or will be qualified as and when required under all applicable
state securities or "blue-sky" laws.
Section 3.7 Financial Statements; SEC Documents.
(a) Since January 1, 1999, the Company has filed with the
Securities and Exchange Commission (the "SEC") all forms, reports, schedules,
statements and other documents, and amendments thereto, required to be filed by
it through the date hereof, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (such forms, reports, schedules, statements,
amendments and other documents, to the extent filed and publicly available prior
to the date of this Agreement, other than preliminary filings, are referred to
as the "SEC Reports").
(b) The Company is subject to Section 13 of the Exchange
Act and is in compliance with its reporting obligations thereunder, satisfies
the current public information requirement of Rule 144(c)(1) under the
Securities Act (and is current in such reporting obligations) and is currently
eligible to file a registration statement on Form S-3 under the Securities Act.
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(c) On the date of filing of each of the SEC Reports, such
Report, (a) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading and (b) complied as to form in all material respects with
the applicable requirements of the Exchange Act.
(d) The financial statements for the Company filed with the
SEC in its Form 10-K for the year ended December 31, 1998 present fairly the
financial condition and the results of operations of the Company as of the dates
and for the periods indicated, and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis ("GAAP").
The unaudited financial statements for the Company filed with the SEC in its
Form 10-Q for the quarter ended September 30, 1999 present fairly the financial
condition and the results of operations of the Company as of the date and for
the period indicated, and have been prepared in accordance with GAAP (subject to
year-end audit adjustments not in the aggregate material and except for the
absence of footnotes required by GAAP). The statement of income included in the
unaudited financial statements does not contain any items of extraordinary or
nonrecurring income except as expressly stated therein, and the Company's
balance sheet does not reflect any write-up or revaluation increasing the book
value of any assets.
(e) Since September 30, 1999, except as disclosed in
Schedule 3.7.5 hereto, (a) the Company has conducted its business only in the
ordinary course, and has not incurred any (i) liabilities or obligations (except
such as were incurred in the ordinary course of the Company's business
consistent with past practice and which do not exceed $100,000 in the aggregate)
and (ii) indebtedness for money borrowed (whether absolute, accrued, contingent
or otherwise), (b) no event has occurred or circumstance or state of facts
exist, whether or not in the ordinary course of business, which has had or could
reasonably be expected to have a material adverse effect on the business,
operations, condition (financial or otherwise) or properties of the Company and
(c) the Company has not set aside, declared or paid any dividend or other
distribution to any of its securityholders.
(f) Except as disclosed in the SEC Reports or in Schedule
3.7.6 attached hereto, the Company is not subject to any actual or, to the
Company's knowledge, reasonably foreseeable potential material claims or
liabilities (whether absolute, accrued, contingent or otherwise), including,
without limitation, any tax, environmental, ERISA or employment material claims
or liabilities, or any other material debts, liabilities, obligations, claims or
potential material claims.
(g) All taxes, including, without limitation, income,
property, sales, use, franchise, added value, employees' income withholding and
social security taxes, imposed by the United States or by any foreign country or
by any state, municipality, subdivision or instrumentality of the United States
or of any foreign country, or by any other taxing authority, which are due or
payable by the Company, and all interest and penalties thereon, whether disputed
or not, have been paid in full, all tax returns required to be filed in
connection therewith have been accurately prepared and duly and timely filed and
all deposits required by law to be made by the Company with respect to
employees' withholding taxes have been duly made. The Company has not been
delinquent in the payment of any foreign or domestic tax, assessment or
governmental charge or
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deposit and has no tax deficiency or claim outstanding, proposed or assessed
against it, and there is no basis for any such deficiency or claim.
Section 3.8 Subsidiaries; Real Property.
Except as set forth on Schedule 3.8, the Company does not own, directly or
indirectly, any capital stock or other proprietary interest in any other
corporation, partnership, or other entity. The Company does not own or hold,
directly or indirectly, any real property.
Section 3.9 Compliance with Laws; Governmental Authorizations.
The Company is in compliance with all Laws, except for such noncompliance
as would not have a material adverse effect on its assets, business condition
(financial or otherwise), or property. The Company is not required to hold or
maintain any material governmental authorizations, licenses or permits in the
conduct of its business as presently conducted and as proposed to be conducted
(other than any thereof which it holds on the date hereof).
Section 3.10 Litigation.
Except as set forth on Schedule 3.10 hereto, there are no (a) actions,
suits, claims, investigations or other proceedings by or before any governmental
authority or arbitrator pending or, to the knowledge of the Company, threatened
against the Company, or (b) judgments, decrees, injunctions or orders of any
governmental authority or arbitrator against the Company.
Section 3.11 Brokers and Finders.
No person or entity acting on behalf or under the authority of the Company
is or will be entitled to any broker's, finder's, or similar fee or commission
in connection with the issuance of the Shares or the consummation of any of the
transactions contemplated by the Documents.
Section 3.12 Disclosure.
3.12.1 No representation or warranty of the Company contained in this
Agreement or the Schedules hereto, when read together, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
3.12.2 The representations and warranties contained in this Agreement
shall not be affected or deemed waived by reason of the fact that Investor or
its representatives knew or should have known that any such representation or
warranty is or might be inaccurate in any respect.
3.12.3 Except as otherwise provided herein, the representations and
warranties in this Agreement shall survive for all claims made prior to March
31, 2001.
Article IV Representations and Warranties of the Investor.
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Each Investor represents and warrants severally and not jointly to the
Company as follows:
Section 4.1 Organization.
Unless such Investor is an individual, such Investor is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite corporate or partnership power and authority
to enter into this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby.
Section 4.2 Authorization.
Unless such Investor is an individual, such Investor has taken all action
necessary to authorize its execution and delivery of this Agreement, its
performance of its obligations hereunder, and its consummation of the
transactions contemplated hereby and this Agreement has been executed and
delivered by an officer or other authorized representative of such Investor in
accordance with such authorization. This Agreement constitutes a valid and
binding obligation of such Investor, enforceable in accordance with its terms,
subject to bankruptcy, reorganization, insolvency, moratorium, and similar laws
affecting creditors' rights generally and to general principles of equity.
Section 4.3 Investment Representations and Warranties.
(a) Any Shares or Warrant Shares which are acquired by such
Investor hereunder will be acquired by it hereunder for its own account, for
investment and not with a view to the distribution thereof, nor with any present
intention of distributing the same. Such Investor further understands the
transfer restrictions on the Shares and Warrant Shares hereof in the event the
Investor desires to transfer any of its Shares and Warrant Shares.
(b) Such Investor understands that, except as provided in
Section 5 hereof, any Shares acquired by it hereunder have not been, and any
shares of Common Stock issuable upon exercise by such Investor of its rights
under any Warrant, will not be, registered under the Securities Act or
registered or qualified under any state securities or "blue-sky" laws, by reason
of their issuance in a transaction exempt from the registration and/or
qualification requirements thereof, and that they must be held indefinitely
unless a subsequent disposition thereof is registered under the Securities Act
or registered or qualified under any applicable state securities or "blue-sky"
laws or is exempt from registration and/or qualification.
(c) Such Investor understands that the exemption from
registration afforded by Rule 144 (the provisions of which are known to the
Investor) promulgated under the Securities Act depends on the satisfaction of
various conditions and that, if applicable, Rule 144 may only afford the basis
for sales under certain circumstances and only in limited amounts.
(d) Such Investor acknowledges that such Investor has met
with representatives of the Company and has had the opportunity to ask questions
and receive answers concerning the terms and conditions of the offering of the
Shares and Warrant Shares, and to obtain any additional information which the
Company possessed or could acquire without
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unreasonable effort or expense, and has generally such knowledge and experience
in business and financial matters and with respect to such investments as to
enable the Investor to understand and evaluate the risks of such investment and
form an investment decision with respect thereto.
(e) Such Investor has no need for liquidity in its
investment in the Company, and is able to bear the economic risk of such
investment for an indefinite period and to afford a complete loss thereof.
(f) Such Investor is an "accredited investor" as such term
is defined in Rule 501 (the provisions of which are known to the Investor)
promulgated under the Securities Act.
(g) Such Investor has not been formed solely for the
purpose of effecting its investment hereunder.
(h) Such Investor acknowledges that the securities laws and state fiduciary
laws impose certain obligations on persons who trade on or divulge
material non-public information of publicly traded companies.
Section 4.4 Brokers and Finders.
No person or entity acting on behalf or under the authority of such
Investor is or will be entitled to any broker's, finder's, or similar fee or
commission in connection with the transactions contemplated hereby.
Section 4.5 1934 Act Filings.
Such Investor will make all filings (if any) required to be made by such
Investor under Sections 13 and 16 of the Securities Exchange Act of 1934, as
amended, and all regulations thereunder, in connection with the transactions
contemplated hereby.
Article V Registration Rights.
Section 5.1 On or before June 1, 2000, the Company shall file a
registration statement on Form S-3 (or on such other form as may be available to
the Company) (the "Registration Statement") with the SEC for the public sale of
the Shares and the Warrant Shares. For the purpose of certainty, no Investor
shall be obligated to exercise the Warrants held by it in order for the
Registration Statement to cover the Warrant Shares.
Section 5.2 The Company shall use its best efforts to cause such
Registration Statement to become effective not later than 50 days after the date
of filing, and to remain effective until the Warrant Shares are eligible for
sale under Rule 144(k) of the Securities Act. The Investor acknowledges that the
occurrence of material events may require that the Registration Statement be
amended before further sales are permitted thereunder, in which case the Company
will promptly effect such amendment.
Section 5.3 The Registration Statement shall be accompanied by blue
sky clearances in such states as the Investor may reasonably request, provided,
however, the
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Company shall not be required to execute any general consent to service of
process in order to obtain such blue sky clearance, except in a jurisdiction
where the Company is already subject to such process.
Section 5.4 The Company shall pay all expenses associated with the
registration of the Shares and Warrant Shares including reasonable fees of one
law firm which represents the Investor and all due diligence costs, but the
Company shall not pay the Investor's brokerage commissions and underwriting
discounts or the expense of any advisors retained by the Investor (other than
one law firm as provided above).
Section 5.5 The Company shall supply to each Investor a reasonable
number of copies of all registration materials and prospectuses relating to the
registration of the Shares and Warrant Shares. The Company and each Investor
shall execute and deliver to each other indemnity agreements that are
conventional in transactions of this type. The Investor shall cooperate with the
Company in the preparation and filing of the Registration Statement and
appropriate amendments thereto.
Section 5.6 Notwithstanding the effectiveness of any Registration
Statement, the Investor will not prior to August 1, 2000 sell any of the
Company's stock covered by the Registration Statement in a public offering or on
any exchange which such stock is traded.
Section 5.7 The Company shall at all times file such public reports as
shall be required to satisfy the current public information
requirements contained in Rule 144 of the Securities Act, shall not
hinder or delay any sales under such Rule, or permit or suffer its
counsel to hinder or delay any such sales. The Company shall pay the
fees and expenses of its counsel in connection with any such sales.
Section 5.8 Time is of the essence for purposes of this Section 5.
Article VI Board of Directors.
After all Warrants have been exercised in full, for so long as the
Investors and their Affiliates (as hereinafter defined) own, in the aggregate,
at least 75% of the shares of Common Stock (as adjusted for stock splits or
subdivisions) purchased as a result of the exercise of the Warrants, upon
written request from Investors holding a majority of such Warrant Shares, the
Company shall take all actions necessary to cause the Board of Directors of the
Company to approve and appoint, and/or nominate and cause the shareholders of
the Company to elect, one person designated by the Investors, collectively, to
be a member of the Board of Directors of the Company. Whether or not the
Investors designate any member of the Board of Directors, the Investors
collectively may designate one individual (the "Observer") to attend all
meetings of the Board of Directors of the Company (and any committees thereof)
in a non-voting observer capacity, provided that the Observer executes a
customary confidentiality agreement with the Company. The Observer shall be
entitled to receive all reports, presentations and materials as if the Observer
were a member of the Board. Company shall reimburse any one individual member of
the Board of Directors designated by the Investors for any reasonable expenses
incurred in connection with meetings of the Board of Directors and committees
thereof. "Affiliate" shall mean with respect to any Person, any Person directly
or indirectly controlling,
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controlled by or under common control with such Person. "Person" shall mean any
individual, partnership, corporation, limited liability company, association,
trust or other entity or organization.
Article VII Legend.
The Shares shall bear the legend set forth on Exhibit C hereof (the
"Legend"). In addition, all shares of Common Stock issued upon the exercise by
the Investors of the Warrants shall also contain the Legend. The Company will
promptly, upon request and receipt from the Investors of reasonable and
customary written representations, opinions and brokers letters for sales under
Rule 144, remove the Legend (i) in connection with any transfer of Securities
that is registered under the Securities Act or made in compliance with Rule 144
or (ii) when it is otherwise no longer required by applicable provisions of the
Securities Act.
Article VIII Right of First Offer
(a) If any Investor proposes to sell (which term shall include any
disposition) any Shares or Warrant Shares (the "Securities") in a Covered Sale
(as hereinafter defined), such Investor will give written notice to the Company
(the "Transfer Notice") of the number of Securities such Investor proposes to
sell in Covered Sales during the 90-day period (the "Notice Period") commencing
on the date of the Investor's delivery of the Transfer Notice (the "Delivery
Date") and the price per share at which such Investor proposes to sell such
Securities. The Company shall have the right, during the 10-day period
commencing on the Delivery Date, to purchase all, but not less than all, of the
Securities described in the Transfer Notice at the price per share set forth in
the Transfer Notice by delivery to the Investor of (i) the Company's written
irrevocable agreement to purchase all of such Securities at such price per share
and (ii) payment in immediately available funds of the aggregate purchase price
for such Securities to such account or accounts as shall be designated by such
Investor. The right described in the preceding sentence shall terminate if the
agreement and purchase price described in the preceding sentence are not
received by such Investor prior to 4:00 p.m. New York City time on the 10th day
immediately following the Delivery Date. If the Company does not exercise its
right as hereinabove set forth within such 10-day period, such Investor may sell
all or any portion of the Securities described in the Transfer Notice to any
purchaser for a price per share equal to or in excess of the price set forth in
the Transfer Notice. If, at the end of the Notice Period, such Investor has not
completed such sales, such Investor shall no longer be permitted to sell such
Securities in a Covered Transaction without again complying with all of the
provisions of this Section. Notwithstanding the foregoing, such Investor may at
any time amend, supplement or revise any information set forth in any previously
delivered Transfer Notice by delivering an amended Transfer Notice to the
Company, in which event the 10- and 90- day periods described above shall
recommence from the date of Investor's delivery of such amended Transfer Notice
to the Company.
(b) As used in this Section, "Covered Sale" shall mean any sale of
Securities by such Investor other than (i) a sale to an Affiliate of the
Investor or (ii) a transfer that is registered under the Securities Act or
effected pursuant to Rule 144 under the Securities Act.
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(c) Notwithstanding anything in the Documents, the provisions of this
Section shall terminate and be of no further effect on the second anniversary of
the date hereof.
Article IX Indemnification.
Section 9.1 The Company shall indemnify, defend and hold the Investor harmless
against all liability, loss or damage, together with all reasonable
costs and expenses related thereto (including reasonable legal fees
and expenses), relating to or arising from the untruth, inaccuracy or
breach of any of the representations, warranties or agreements of the
Company contained in the Documents.
Section 9.2 Each Investor, severally and not jointly, shall indemnify
and hold the Company harmless against all liability, loss or damage, together
with all reasonable costs and expenses related thereto (including reasonable
legal fees and expenses), relating to or arising from the untruth, inaccuracy or
breach of any of the representations, warranties or agreements of such Investor
contained in the Documents.
Article X Fees and Expenses.
Each party hereto shall bear its own costs and expenses incurred on its
behalf in connection with the preparation, negotiation, execution, and delivery
of the Documents and the preparation for and consummation of the transactions
contemplated thereby and therein; provided, however, that the Company shall pay
the reasonable fees and expenses of one law firm representing the Investor up to
an amount not in excess of $20,000 if each Investor timely pays its Purchase
Price.
Article XI Entire Agreement.
This Agreement (including the Exhibits and Schedules hereto) contain the
entire understanding of the parties with respect to the subject matter hereof
and supersedes all prior agreements and understandings among the parties with
respect to such subject matter, including, without limitation, any oral or
written communications made by an officer, employee, agent or affiliate of the
Company in connection therewith.
Article XII Notices.
All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if personally delivered or if sent by nationally-recognized overnight
courier, by telecopy, or by registered or certified mail, return receipt
requested and postage prepaid, addressed as follows:
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if to the Company:
The A Consulting Team, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Telephone: (000) 000-0000
Attention: Xxxxxx XxxXxx, Chairman & Chief Executive
Officer
if to the Investor:
As provided in Schedule 12
with a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as the party to whom notice is to be given may have
furnished to the other parties in writing in accordance herewith. Any such
notice or communication shall be deemed to have been received (a) in the case of
personal delivery, on the date of such delivery, (b) in the case of an
internationally-recognized overnight courier, on the next business day after the
date when sent, (c) in the case of telecopy transmission with confirmation of
its receipt, and (d) in the case of mailing, on the third business day following
that on which the piece of mail containing such communication is posted.
Article XIII Amendments.
The terms and provisions of this Agreement may only be modified or
amended, or the performance thereof waived, pursuant to an instrument signed by
(a) the Company and the Investor or (b) the party against whom enforcement of
such modification, amendment or waiver is sought.
Article XIV Counterparts.
This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
Article XV Headings.
The section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Article XVI Governing Law.
12
This Agreement shall be governed by and construed in accordance with the
domestic laws of the State of New York, without giving effect to any law or rule
that would cause the laws of any jurisdiction other than the State of New York
to be applied.
Article XVII Successors and Assigns.
Except as otherwise provided herein, the provisions hereof shall inure to
the benefit of, and be binding upon, the successors and permitted assigns of the
parties hereto. No assignment of the Documents (or delegation of the Company's
obligations thereunder) may be made by the Company at any time, whether or not
by operation of law, without the Investors' prior written consent, provided,
however, that this sentence shall not be interpreted to require a separate
consent of the holders of the Warrants in connection with any acquisition,
business combination, or similar transaction where all or substantially all of
the assets or securities of the Company are acquired by a third party. No
Investors may assign its rights or delegate its duties hereunder without the
Company's prior consent, except that any Investor may assign any or all of its
rights under this Agreement to an Affiliate of Investor without the Company's
consent provided that such Affiliate delivers to the Company an agreement
reasonably satisfactory to the Company in which such Affiliate assumes all of
the Investor's payment and other obligations under this Agreement and makes the
representations made by the Investor hereunder, in which event the assignor
shall be released from its obligation to pay its portion of the Purchase Price
hereunder.
Article XVIII Delays or Omissions.
Except as expressly provided herein, no delay or omission to exercise any
right, power or remedy accruing to the Company or such Investor upon any breach
or default of any party under any Document shall impair any such right, power or
remedy of the Company or such Investor nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of the Company or such Investor of any breach
or default under any Document, or any waiver on the part of any such party of
any provisions or conditions of any Document, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under the Documents or by law or otherwise afforded to the
Company or such Investor, shall be cumulative and not alternative.
Article XIX Stock Certificates.
Upon surrender of any certificate representing Securities for exchange at
the office of the Company, the Company at its expense will cause to be issued in
exchange therefor new certificates in such denomination or denominations as may
be requested for the same aggregate number of securities represented by the
certificate so surrendered and registered as such holder may request. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of any certificate evidencing any of the
Securities and (in case of loss, theft or destruction) of indemnity reasonably
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such
certificate, if mutilated, the Company will make and deliver in lieu of such
certificate a
13
new certificate of like tenor and for the number of shares evidenced by such
certificate which remain outstanding.
Article XX Specific Enforcement.
The Company acknowledges and agrees that irreparable damage would be
suffered by Investor in the event that any of the Company's covenants contained
in the Documents were not performed in accordance with their specific terms or
were otherwise breached, and that money damages are an inadequate remedy for
breach thereof because of the difficulty of ascertaining and quantifying the
amount of damage that will be suffered by the Investor in the event that such
covenants are not performed in accordance with their terms or are otherwise
breached. It is accordingly agreed that the Investor shall be entitled to an
injunction or injunctions to prevent breaches of the covenants referred to in
the immediately preceding sentence and to enforce specifically the terms and
provisions of the Documents in any court having jurisdiction, this being in
addition to any other rights and remedies to which the Investor may be entitled
at law or equity.
14
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
on the date first above written.
THE A CONSULTING TEAM, INC.
By: /s/ Xxxxxx XxxXxx
------------------------------
Name: Xxxxxx XxxXxx
Title: President and Chief
Executive Officer
/s/ Xxxxx Xxxxx
---------------------------------
Xxxxx Xxxxx, individually
/s/ Xxxx Xxxxxx
---------------------------------
Xxxx Xxxxxx, individually
DS POLARIS GROUP
on behalf of certain Funds
By: /s/ illegible
------------------------------
Name:
Title:
SFK GROUP
By: /s/ illegible
------------------------------
Name:
Title:
ARISON INVESTMENTS LTD.
By: /s/ Moddi Keret
------------------------------
Name: Moddi Keret
Title: Vice President and Chief
Financial Officer
15
Schedule 2.3.1
--------------
Purchase Price Shares
-------------- ------
Xxxxx Xxxxx $1,900,000 271,428
DS Polaris Group (on
behalf of certain Funds) $ 250,000 35,714
Xxxx Xxxxxx $ 100,000 14,285
SFK Group $ 250,000 35,714
Arison Investments Ltd. $ 250,000 35,714
Total $2,750,000 392,855
Schedule 2.3.2
--------------
60-Day Warrant
--------------
Investor Purchase Price Warrant Shares
-------- -------------- --------------
Xxxxx Xxxxx 0 0
DS Polaris Group (on
behalf of certain Funds) $999,999 142,857
Xxxx Xxxxxx 0 0
SFK Group $999,999 142,857
Arison Investments Ltd. $2,249,996 321,428
Total $4,249,994 607,142
2-Year Warrant
--------------
Investor Purchase Price Warrant Shares
-------- -------------- --------------
Xxxxx Xxxxx $3,528,564 271,428
DS Polaris Group (on
behalf of certain Funds) $2,184,884 168,068
Xxxx Xxxxxx $ 185,718 14,286
SFK Group $2,184,884 168,068
Arison Invesments Ltd. $4,915,950 378,150
Total $13,000,000 1,000,000
Schedule 3.7.5
--------------
Reference is made to the press release of The A Consulting Team, Inc. announcing
the unaudited results for the year ended December 31, 1999.
Schedule 3.7.6
--------------
None
Schedule 3.8
------------
T3 Media, Inc.
XxxxxXX.xxx
Schedule 3.10
-------------
Litigation
----------
None
Schedule 12
-----------
Addresses
---------
Mr. Xxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxx Xxxx 00000 Israel
Fax: 000-000-0-000-0000
Xxxx Xxxxxx
c/o Law Offices of Xxxxx Xxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
DS Polaris Ltd.
Xxxxxx Xxxxx
00 Xxxxx XxXxxxxx Xxxxxx
Xxx Xxxx 00000 Israel
Attention: Messrs. Chemi Xxxxx and Xxxx Xxxxxx
Fax: 000-000-0-000-0000
SFK Group
Xxxxxxxx Xxxxx
00 Xxxxxxx Xx.
Xxx Xxxx 00000 Israel
Fax: 000-000-0-000-0000
Arison Investments Ltd.
Xxxxx Center
00 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxx Xxxx 00000 Xxxxxx
Attention: Mr. Moddi Keret
Fax: 000-000-0-000-0000
EXHIBIT A
---------
Opinion of Counsel
------------------
1. The Company is a corporation validly existing and in good standing
under the laws of the State of New York. The Company is duly qualified to
transact business and is in good standing as a foreign corporation in each
jurisdiction identified in Schedule 1 hereto.
2. The Shares and Warrant Shares (collectively, the "Securities") to be
issued pursuant to the Documents have been duly authorized and, when issued as
contemplated by the Documents, will be validly issued, fully paid and
nonassessable and free of preemptive rights pursuant to law or in the Company's
Certificate of Incorporation.
3. Assuming that the representations and warranties of the Investors
contained in Section 4.3 of the Agreement are true, it is not necessary in
connection with the offer, sale and delivery of the Securities to the Investors
pursuant to the Documents to register the Securities under the Securities Act of
1933, as amended.
4. The Company has all requisite corporate power and authority to execute
and deliver the Documents and to perform its obligations thereunder. The
execution, delivery and performance of the Documents by the Company have been
duly authorized by all necessary corporate action on the part of the Company.
The Documents have been duly and validly executed and delivered by the Company
and constitute the legal, valid and binding obligations of the Company,
enforceable against it in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and, to general principles of equity and principles of commercial
reasonableness, good faith and fair dealing.
5. The execution and delivery by the Company of the Documents and the
performance by the Company of its obligations thereunder will not conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Certificate of Incorporation or by-laws of the Company, (ii)
New York or federal law, or (iii) any judgment, writ, injunction, decree, order
or ruling of any court or governmental authority binding on the Company of which
we are aware.
6. No consent, approval, waiver, license or authorization or other action
by or filing with any New York or federal governmental authority is required in
connection with the execution and delivery by the Company of the Documents, the
consummation by the Company of the transactions contemplated thereby or the
performance by the Company of its obligations thereunder.
EXHIBIT B-1
-----------
[See Exhibit 4.2 to the Registration Statement on Form S-3 to which this
Stock Purchase Agreement is attached as an Exhibit]
EXHIBIT B-2
-----------
[See Exhibit 4.3 to the Registration Statement on Form S-3 to which this
Stock Purchase Agreement is attached as an Exhibit]
EXHIBIT C
---------
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SUCH ACT. ADDITIONALLY, UNTIL MARCH
19, 2002, THE TRANSFER OF THESE SECURITIES IS SUBJECT TO THE CONDITIONS,
INCLUDING A RIGHT OF FIRST OFFER, SPECIFIED IN THE STOCK PURCHASE AGREEMENT
DATED AS OF MARCH 19, 2000, AMONG THE A CONSULTING TEAM, INC. AND THE OTHER
PARTIES THERETO, AND NO TRANSFER OF THESE SECURITIES SHALL BE VALID OR EFFECTIVE
UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED. UPON THE FULFILLMENT OF CERTAIN OF
SUCH CONDITIONS, THE A CONSULTING TEAM, INC. HAS AGREED TO DELIVER TO THE HOLDER
HEREOF A NEW CERTIFICATE, NOT BEARING THIS LEGEND, FOR THE SECURITIES
REPRESENTED HEREBY REGISTERED IN THE NAME OF SUCH HOLDER. COPIES OF SUCH
AGREEMENT MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE A CONSULTING TEAM, INC."
